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Patent thickets, licensing and innovative performance

Listed author(s):
  • Cockburn, Iain M.
  • MacGarvie, Megan J.
  • Müller, Elisabeth

We examine the relationship between fragmented intellectual property (IP) rights and the innovative performance of firms, taking into consideration the role played by in-licensing of IP. We find that firms facing more fragmented IP landscapes have a higher probability of in-licensing. For firms with small patent portfolios we also find a positive association between fragmentation and licensing costs as a share of sales. We observe a negative relationship between IP fragmentation and innovative performance, but only for firms that engage in in-licensing. In contrast, greater IP fragmentation is associated with higher innovative performance for firms that do not in-license. Furthermore, the effects of fragmentation on innovation also appear to depend on the size of a firm’s patent portfolio. These results suggest that the effects of fragmentation of upstream IP rights are not uniform, and instead vary according to the characteristics of the downstream firm.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-101 [rev.].

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Date of creation: 2009
Handle: RePEc:zbw:zewdip:08101r
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